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What Happens if You Lose a Car Accident Lawsuit?
What You Need to Know

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Being Sued For Car Accident: What Can They Take?

If you’ve been in a car accident and received a notice you’re being sued by the other party, you’re probably wondering: what can they take? You should know what you can be sued for, what the next steps are, and if you need a car accident lawyer.

Personal injury lawyers at Schmidt & Clark have been dealing with car accident claims for close to three decades. Today, our experts will explain what you stand to lose in a car accident lawsuit.

Summary of the Key Findings

  • After a car accident, the person at-fault should contact their insurance provider straight away.
  • The insurance provider can hire an attorney for you, or you can get an attorney that will represent your interests only.
  • If you have a low insurance limit, and the accident damages are high, you’ll have to pay for the difference yourself, and may end up losing all of your assets and savings.

What Happens After a Car Accident?

Frustrated woman calling for help after an accident

You should do several things after a car accident. The first thing is to get medical help.

Even if you’re feeling fine, you may start seeing consequences in the upcoming weeks, so get checked by a medical professional right away.

After getting medical attention, there are several steps to follow:

1. Notify the Insurance Company

Driver calling his Car's insurance company Start by reaching out to your car insurance company.

Even if it’s been a while since the car accident, and you’ve switched to another insurance company in the meantime, you should contact the insurance company that handled the original claim.

Depending on whether you’re in an at-fault or a no-fault state, there are differences in how much insurance companies will cover. If you’re in an at-fault state, and you’re the at-fault party, you’re responsible for the damages caused.

But, all drivers in an at-fault state are required to have a minimum amount of liability car insurance.

This means your original policy will cover the penalties and injuries. The insurance company has to protect your rights under the policy you had at the time of the accident.

If you’re in a no-fault state, there can be limits to the right to sue and how much the other party can get from an insurance policy. The other party will need clear evidence and to have sustained severe injuries. Otherwise, state laws will restrict general injury suits.

2. Insurance Company Will Hire an Attorney

Insurance agent checking damaged car The insurance provider will negotiate a settlement with the other party for their losses and injuries sustained in car accidents. If the victim isn’t happy with the offered settlement, they can decide to file a lawsuit.

If a lawsuit is filed, your insurance company will hire an attorney to defend you, or you can hire an attorney at your own expense.

If you aren’t happy with the insurance company attorney, it can be beneficial to hire one yourself. 

The attorney will go over all the accident details with you and review the facts to give you professional guidance. If all evidence shows you’re at fault, the attorney will suggest settling. 

3. Discovery Process

During the discovery process, both parties’ attorneys take witness depositions, file interrogatories, and request for admission. This is done to learn everything about the car accident and gather all the necessary evidence.

4. Trial

After the discovery, the lawyer can start negotiations with the injured party to settle the car accident claim, which would end the lawsuit. The car accident lawsuit goes to trial if the attorney doesn’t settle. Each party presents their evidence, and you can be asked to testify. The jury decides whether to award damages to the injured person and how much the damages should be.

Also read:

Who Pays in a Car Accident Settlement?

Paying someone money Once the trial ends, and the jury proclaims you caused the accident and the amount of compensation the victim is to be awarded, you’re responsible for the damages.

But, this doesn’t mean you have to pay out of your own pocket. In fact, that rarely happens. The car insurance company will pay up to your policy limits.

For example, if you have minimum liability insurance, the insurance company will pay up to $25,000.

Let’s say the jury verdict is $35,000. You’re responsible for paying for everything the insurance company’s policy limit doesn’t cover. So, in this case, you’ll have to pay $10,000 out of your own pocket.

Note: Car accident damages can go up to hundreds of thousands of dollars, so getting higher insurance coverage is a good idea.

Also, it’s always in the insurance company’s best interest to pay as little as possible, so you should discuss the policy limits before you purchase insurance.

What You Can Lose in a Car Accident Lawsuit

Taking a photo of a car's damaged part

If it’s established you have personal liability for the accident, and your liability insurance doesn’t cover all the damages for the personal injury claims, you can lose everything. The at-fault driver has to pay for medical bills, lost wages, property damage, bodily injury, and more. 

Here are some examples of personal assets you can lose in car accident lawsuits:

  • Car — Depending on the state you’re in, you can be exempt from a few thousand dollars in a car and personal property. For example, you can be exempt from up to $1,000 of your car value under Florida law. It means your car can’t be used in personal injury cases to satisfy the injury claim. However, this isn’t the case in all states, and depending on your area, you may end up without a car in a car accident case.
  • Home — In certain cases, you can even lose your home, especially if it’s a second home. If your insurance policy limits are small, and you have to pay hundreds of thousands of dollars, a lien would be filed against the home. Then, you’d have to pay the lien to sell the house. However, there are exceptions in some states, where the home is protected under homestead exemptions.
  • Life savings — These are among the most common assets people lose if found guilty after a traffic accident. However, retirement accounts, for example, 401(k), are protected under the Employee Retirement Income Security Act of 1974 [1].
  • Other assets — Essentially, nothing is off-limits. The plaintiff’s attorney can issue a citation to find out how much money you have and your assets. Depending on the car insurance limit you have, you can lose all your assets.

Related article: What is the Average Settlement for Car Accident Neck Injuries?

Can Liability Insurance Protect You?

Car Insurance form with money

If you want to make sure your assets are not taken away in a lawsuit, your best bet is liability insurance. Liability insurance covers the costs of unintentionally injuring another person or their property.

Apart from these, liability insurance also covers personal injuries, such as libel and slander, as well as attorneys’ fees for civil lawsuits.

“Without liability insurance, you’re responsible for damages and injuries if you caused them. This can happen in a car, in your home, or your business.” Lev Barinskiy, CEO of SmartFinancial Insurance

Liability coverage is in your best interests, as it costs around a few hundred dollars per year, but it can end up saving you thousands of dollars after an auto accident.

FAQ

Can I Be Sued Personally for Victim’s Damages After a Car Wreck?

Yes, you can be sued personally for damages in car accident cases, even if you have insurance.  The insurance company will only pay up to the insurance limits, and you’ll be responsible for making sure the difference between the limit and the total damages is fully paid. 

Can I Be Sued After the Insurance Companies Pay?

If the insurance company paid a fair settlement to the injured party, the settlement will also include a waiver of all claims.  In other words, you can’t be sued after the insurance paid the settlement.

Get Legal Advice from a Professional Law Firm

If the other party isn’t satisfied with the settlement offer, or your insurance limit is low and doesn’t cover all the car accident damages, you can end up being sued and having to pay out of your own pocket. Worst case scenario, you’ll lose your home and life savings.

You need to know your legal rights and have an experienced lawyer to avoid this. Schmidt & Clark lawyers will give you a free consultation and a case evaluation after the initial consultation.

Contact us today and get the professional defense to help you save your assets.


References:
1. https://www.dol.gov/general/topic/retirement/erisa 

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